Novia claims ‘first’ smart beta ETF suite for financial advisers

BetaNovia Financial, a UK wealth management platform, has partnered with two US firms to bring a smart beta investment portfolio to financial advisers.

The quant-driven tactical asset allocation portfolio invests in smart beta exchange-traded funds (ETFs) and is the first of its kind to be offered to financial advisers in the UK, said Novia, a firm founded in 2008 and based in Bath.

The portfolio – available from March 14 – is offered through Novia’s own discretionary fund management arm, Copia Capital Management, and hinges on a partnership with a US-based ETF provider, First Trust Advisors (FTA), and a US momentum investor, Dorsey, Wright & Associates (DWA).

There are two underlying portfolios, one from each of the US partners. For example, the Copia First Trust Smart Beta portfolio uses FTA’s AlphaDex ETFs, which select and weight stocks based on investment merit, as opposed to size.

Last June, Novia reported that ETF investments on its platform had increased by 70% over the previous 12 months, bringing ETF assets under management to £100 million (€129 million).

FTA and DWA already have a decade-long partnership in the US. The partnership has seen the firms raise $3.4 billion (€3 billion) together since March 2014 through their First Trust Dorsey Wright Focus 5 ETF, while an international version of the product has raised $500 million since launching in July 2014.

Jay Gragnani, vice president at DWA, said entering the UK market was “a new frontier” for the firm.

FTA launched its first ETF in Europe in 2013 and had over $104 billion assets under management of which $42.7 bilion was in ETFs at the end of 2015.

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